Prime Time on public service "Union appointed avc providers Vs Notional Service"

Status
Not open for further replies.
From what I can see, there are advantages and disadvantages to both Notional Service Purchase and AVCs. In some instances NSP may be more suitable for an individual depending on their personal circumstances/ attitude to risk, costs of options etc. and in some instances AVCs may be more suitable.

Surely the job of a Financial Adviser is to provide advice to Teachers / Nurses with regard to both sets of options and let the Teacher/ Nurse make up their own mind.

I note that the Cornmarket hold Authorised Advisor status which means they can provide broad based indpenendent financial advice so why then can they only provide information on the NSP scheme and not advise on it. Am I missing somthing here.
 
There's no doubt that there are advantages to AVCs and disadvantages to nostional service purchase. However, some years ago, I was speaking to an AVC seller (probably Marsh financial services) and outlined the specific thing I wanted to fund for - essentially a buy-back of years so I could retire on full pension at 60. The scenario I outlined was (in my personal opinion) a text-book example of where NSP is ideal; what I got was a hard sell on AVCs which would have been substantially more expensive, and not a whisper of a mention of NSP. I ended up not arranging NSP for about a further five or six years, and despite my now higher position and salary it's still around the inflation adjusted cost of the AVC recommendations I got back then. Had they pointed me in the direction of NSP at the time, I'd have started buying back those years straight away and it would have cost me significantly less over the years - and I have a lot of years left to retirement!

Point is, I suppose, that sales people are going to extol their own products and often to the exclusion of other options. I would now recommend that any person seeking advice on pensions, lump sums or retirement do a lot of research - and if they aren't equipped to do it, then to get proper, independent, financial advice. Several unions recommend companies who present themselves as advisors but who are absolutely not independent.
I think those recommendations, issued without proper health warnings, do the members a real disservice.
 
Having read on the threads, it proves to me without a doubt that Askaboutmoney IS the best website on the planet. If anyone did a search on AAB on Marsh or Cornmarket and read up on the threads, they would be left in no doubt that for that for years these companies have been overcharging their customers for years with the backing of the Unions, which is a disgrace. AAM members were onto them a long time now.
By the way I got burned with Marsh up to recently. By researching on this website mostly, I've now stopped my supscriptions to Marsh left my fund with them and have opened a Standalone Prsa/AVC with Eagle Star instead
 
I can only tell you of my experience with Cornmarket.

As I was on maternity two years ago the revenue/dept over taxed me like all female teachers on maternity. Who spotted it - Cornmarket. I was not getting my full teachers tax credits. Who again spotted it - Cornmarket. In fact they were the only company who checked my finances thoroughly and I was over the moon with a cheque of over €3K back from revenue.

I do have a great relationship built up with the consultant (salesman maybe). He returns my calls everytime.

More than I can say about the dept. Even when I asked about buying back I had to write a letter requesting the info and then they gave me only 2 months to jump on board for life.

I knew about years and buying back but I prefered to leave my children my savings when I die.

Cornmarket I'm sure is not for everyone but I can honestly not say a bad word about them from my experience.
 
Hi and welcome to AAM!

Its great to hear of your positive experience with Cornmarket!

If you read some of the posts here you will see the advice that in matters of personal taxation you should seek independant, professional advice from qualified individuals. (Its something of a mantra around here!).

In relation to the cornmarket products for teachers if you search AAM for "cornmarket" you will get plenty of hits: some which are supportive of Cornmarket and some of which are highly critical of Cornmarket.

In fairness to Cornmarket they are one of a small number of companies who actually understand the complexity of the Teachers Superannuation Schemes. I suggest that one should recognise that Cornmarket's objective is to sell product and that you should discount their advice accodingly.

aj
 
My tuppence worth.

I read the Cornmarket defence and in particular the long conversation between the sales rep and the mystery shopper.

Okay, there are weaknesses but this does not seem in the same league as the misselling scandals of earlier Prime Time mystery shoppers.

1) Yes, the rep clearly had a vested interest in promoting the AVC and damning the NPS. But to be fair they are very different animals and the findings of the Pensions Ombudsman and Tony Gilhawley, with which I agree, certainly provide a justification for the Cornmarket position.

Actuarially a guaranteed state indexed pension is better than anything even a completely charge free PRSA AVC but I think most people would chose an AVC even if the two options were explained by a completely unbiased actuary, in fact the rep convinced me of the qualitative superiority of the former.

2) The rep slightly overstated the growth prospects of the Balanced Fund at 7%, not a hanging offence.

3) A bit too much made of the upfront tax relief - this is well known to be 75% tax deferred. But the whole pensions industry overplays this one.

4) Cornmarket is owned by Irish Life. Interesting nobody in the debate seems concerned by this and maybe there is nothing to be concerned about but the rep did say they were 2 separate companies - that's a bit disingenuous.

5) I think most people would be aware of the financial vested interest of the rep and would fully expect a bias in favour of the AVC.

Finally, I don't know how that actor sleeps nights. It was a very sneaky performance stuffed with entrapment questions and in the circs the rep came across very well.

[I have no axe to grind for Cornmarket or Irish Life.]
 
Let's call a spade a spade here...

Cornmarket earn commission for selling AVCs and nothing for promoting NSPs.

I believe that, unless people are willing to pay up-front for advice human nature will take over. Even discounted brokers are in business to make money.

Would it be more honest for the brochures in this instance to state that, if people want to purchase NSPs then they need to do separate research themselves. How would he regulator handle this I wonder?
 
Hi G123,

I like your observation in 2006!

 
I think in the AVC debate a point has been missed. While in certain circumstances an AVC might have benefits over a NSC the unions colluded with Cornmarket to sell a scheme that had significant additional charges over a product that their members could have got accross the counter from many financial companies.

So even if an AVC was the best option for you, you were been ripped of by up to 5% on your contributions, and the union got some diaries and advertising ?

I can't believe how there is not more criticism of the actions of the unions who also get significant contributions from their members, and whose executive enjoy high saleries from the contributions of their members.

I think the unions owe their members an frank explaination on what happened.
 
I posted some queries on this site some time ago in relation to buying notional service etc., and apart from some advice from posters, I can tell you nothing is made easy when trying to investigate that minefield.

The guy in the Dept of Finance informed me that they are not allowed to give any advice. Indeed even to find out figures for calculation purposes is like pulling teeth.

Brokers don't seem to have a full grasp of anything that might complicate straight forward purchase of ns.

So where can anyone find TRULY independent and QUALITY advice. Why is this so hard to find? I too have AVCs and have given up trying to understand NS given my advanced age and lack of service...MINEFIELD...be warned.
 

No one is saying there's anything wrong with AVC Pensions per se. Just that the charges on some AVC schemes are higher than they need to be. I set up an execution-only AVC last week, 100% allocation rate, 1% annual fee. I can live with those charges. But a 95% allocation rate - no, that's too expensive for me, despite the tax relief.
 
I feel sometimes your damned if you do, damned if you don't. We all want to prepare for retirement so Primetime and gang tell us to do NSP's. You find out then that if you don't live long enough you won't see your contributions. So you then go with the next option AVC's. Then this!!! ARRGGH.

I have been speaking to loads over the weekend and I really don't know what to do. I was confident on Friday but there are so many ups and downs to all schemes. I read somewhere that there are AVC's that have little or no charges but I never heard of the companies before. I would prefer to stick with i.e. Irish Life as they have the backing of the Gov and I am familiar with them.

I really think the Ministers office should get involved here and tell us all in black and white which is the best option. If I stop the AVC then the only real looser is me cause I'll have nothing set up bar my superann. If I save in my own deposit account I don't get tax relief.

This country is getting more and more complex to live in.
 
tmurr said:
I read somewhere that there are AVC's that have little or no charges but I never heard of the companies before. I would prefer to stick with i.e. Irish life as they have the backing of the Gov and I am familiar with them.
Click to expand...

You can buy execution-only AVC pensions from the big guys (Irish Life, Eagle Star etc). Plenty of info here on AAM. If you're unhappy with your current scheme you can stop contributing to it and just start a new one, afaik.
 
Thanks for that, Monday morning 1st thing. On another note a friend was telling me that George O'Sullivan (independant pensions guy with glasses, X TUI and accountant) who was on primetime has been reported to the financial regulator. I read it on data from Cornm. but didn't know it was him. Apparantly he told someone to cash in their AVC's and buy NSP's and it was the wrong info. Now the person can't seek compensation from him as he is non insured and actually had no qualification at all on pensions, apparantly. When I heard this it really opened my eyes. Yet this guy was all nice as pie on PT giving advice. I wonder did PT know this. I also wonder if I did get wrong advice could I sue Cornmarket.
 
extopia said:
You can buy execution-only AVC pensions from the big guys (Irish Life, Eagle Star etc). Plenty of info here on AAM. If you're unhappy with your current scheme you can stop contributing to it and just start a new one, afaik.
Click to expand...

im nearly sure irish life only provide a prsa avc if you go through cornmarket.
 
My tuppence worth.


3) A bit too much made of the upfront tax relief - this is well known to be 75% tax deferred.

please clarify what '75% tax deferred' means.

Thanks.
Click to expand...
The benefits come as a 25% lump sum with the other 75% as taxable income or ARF. However, as the rep explained, the ARF can be "managed" to make the tax on the way out standard rate whilst you enjoyed higher rate relief on the way in. The other tax advantage is gross roll-up, which interestingly the rep didn't refer to. On balance 7 out of 10 to the rep for his presentation of the tax position.
 
Status
Not open for further replies.
Menu
Log in
Register